Asked by Affan A-One on Jul 21, 2024
Verified
The difference between accounts receivable and allowance for doubtful accounts
A)Accounts receivable turnover
B)Net realizable value
C)Accounts receivable
D)Aging report
E)Receivables
F)Direct write-off method
G)Allowance for doubtful accounts
H)Bad debt expense
I)Factoring
Net Realizable Value
The estimated selling price of goods or assets in the ordinary course of business minus any costs involved in the sale or disposal process.
- Identify the influence of non-recoverable accounts on the net realizable value and the expense related to bad debts.
- Acquire knowledge about the purpose and method of calculating an allowance for doubtful accounts.
Verified Answer
BW
Bryce WatkinsJul 28, 2024
Final Answer :
b
Explanation :
The net realizable value of accounts receivable is calculated by subtracting the allowance for doubtful accounts from the total accounts receivable. This represents the amount of receivables a company expects to actually collect.
Learning Objectives
- Identify the influence of non-recoverable accounts on the net realizable value and the expense related to bad debts.
- Acquire knowledge about the purpose and method of calculating an allowance for doubtful accounts.
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